Irish Election are pleased to announce our collection of Irish 
Reduction of the 42% Income Tax Rate
Read more about: Fianna Fail, Taxation
Brian Boru made a very good point by referring to the caveat in the FF/PD manifesto.
If economic circumstances allow.
The estimates for the tax take for 2006 were grossly underestimated. Whether this was Fianna Fail fudge (probably) or incompetence (probable, but unlikely as all civil servants were awarded the 100% maximum top-up bonus proposed under the Benchmarking Agreement, cobbled up by Messers Begg, O’Connor & Healy.)
Regardless, Cowen must agree that economic circumstances allow.
In a post I wrote in March 2006, I suggested that the “Tipping Point” in the Irish housing market had arrived. Belatedly, the Central Bank has admitted that the market is already off by 14%. Recent auctions show that the suggested AMV was not achieved and a significant number of properties have been withdrawn and remain unsold. Lending on second houses, most of which were revealed as being empty during the counting under the recent Census of Population, and on expensive motor-cars, has reached dangerous proportions & Irish Banks should be very concerned. It is probable that their Bad Debt Reserves will have to be reclassified as Bad Debt Provisions and that even that sum may prove insufficient to deal with the fall out from the shrinkage of property prices. So Cowen may take the view that economic circumstance do not allow.
Which is why the Opposition should be asking pertinent questions such as “Do economic circumstances allow?”
However, Labour & the Greens are unlikely to agree to a reduction in the standard rate of Income Tax. In fact the Greens would increase it, and Labour would also like to do the same, but have had to restrict themselves to a “no change” statement to appease their putative partners in Fine Gael. Sinn Fein/IRA have no economic policy, but as their support comes from the disadvantaged/unemployed/unemployable sectors, they are likely to pursue a policy of confiscation, similar to Stalinist models & those that Castro/Chavez support.
So the economic circumstances may be about to change. Professor Alan Ahearne, in a recent paper, has, once again, pointed out the dangers for Ireland consequent upon the economic downturn in the USA, especially the fall in housing start-ups and the slowdown in the motor industry. If the Opposition fail to ask the pertinent questions, the electorate have an opportunity to exercise their mandate and demand cuts in Government, their public sector support organisation, and the consequent excessive waste. In that way, the benefits of the circumstances of our economic success, won by the hard work and enterprise of the private sector, will allow, and can be passed on to those same people, in the form of a reduction of 2% in the standard rate of income tax. They have earned it. Ahern and his comrades in the unions have not.
may prove insufficient to deal with the fall out from the shrinkage of property prices. Well bad debts only occur when people can’t pay for the loans. Their value of the home doesn’t really. Matter the bad debts will only occur for people who rely on the property market, and people who depend on people who rely on the property.
demand cuts in Government; their Public Sector support organisation; & the consequent excessive Waste.
True we see the increase in government in places where they are not needed while we see caps in health and education
Lads, the tax rate is not the tax take. You should reduce the number paying the top rate first and look at reducing the rate later.
Why does a debate on taxation always develop into semantics?
There is only one way to reduce taxation.
THAT IS FOR GOVERNMENT TO REDUCE SPENDING.
When he was challenged on McDowell’s comment about his proposed reduction of Stamp Duty, what did Cowen reply?
“If I reduce Stamp Duty, I will need to find another source for the loss of revenue.”
In other words, the process begins with “what do we need to spend” to stay in power? The answer is invariably TAX.
If Dan wants to reduce the number of people on the top marginal tax rate (at any time) he is asking to stop the clock of Benchmarking; Union demands; Inflation etc…
Each satisfied demand for higher wages catapults the marginal earner back into the tax band he/she has just left!
This is axiomatic.
Some spending actually leads to an increased tax take. Actually, almost all government spending comes back to it in the form of tax increases, not enough to cover the cost but it means that the headline figure is rarely the real cost. If we were to spend 100 million on some project or other then it is like a substantial amount of that could be 30 million would come back to the revenue in the form of income taxes and VAT on purchases the workers had made.
Benchmarking would be fine if we could see what the productivity gains were and I’d be really interested in seeing how the comparisons made for benchmarking (1) compare to the private sector reality of jobs losses in IT and so on.
Modify stamp duty in the manner that McDowell hinted at simply because the intake is running hot this year is too reactive. We should have planned reform of stamp duty over a number of years with the intent of nudging the housing market more towards building for owner-occupiers and less so holiday homes and so on.
I wonder if this post is pointless since it’s been commented again and again that the same pre-tax amount comes out the same whether you tax it on contribution (Roth) or on withdrawal (Traditional) if tax rates are the same.